IslamicFinance.de

The ageing population of UAE is expected to highly demand for Islamic savings products. Thereby, Shariah compliance of the products is the major factor in making a choice. National Bonds Corp offers a number of different savings products including a mudaraba fund now worth 4.6bn dirhams ($1.25bn) in assets under management. The company's future plans include the development of a range of savings which aim to satisfy the growing demand.

Emirates Islamic Bank said it will sponsor the sixth Takatof Ramadan Project that was recently set up by the Emirates Foundation for Youth Development. The scope of the project is to create an interactive social network among all community and to help disadvantaged families.

Islamic lending companies from Dubai’s DIFC Investments LLC to Saudi Arabia’s Etihad Etisalat take advantage of falling borrowing costs. As a result, Islamic syndicated lending in Europe, the Middle East and Africa rose to a four-year high this year. Shariah-compliant transactions this year are as high as $8.37 billion (Dh30.74 billion). The largest share belongs to Etihad Etisalat and is worth 10 billion-riyal ($2.67 billion). This year’s lending is over $3 billion higher than last year's.

Incepta Pharmaceuticals Ltd signed a Musharaka deal worth US $ 20 million with Standard Chartered Bank, thus becoming the bank's Wholesale Banking Saadiq client. The money is a term finance for 5 years and will be used for Incepta Pharma expansion projects.

The third annual Invesco Middle East Asset Management Study shows that strong corporate returns are constraining the flow of year-on-year capital within family offices in the Gulf Cooperation Council (GCC) from ­personal assets to corporate (family business) assets.
Two-fifths (40%) of family offices interviewed noted a strong shift from personal to corporate assets. Moreover, high net-worth assets in the Middle East account for nearly 4% of the global high-net-worth asset pool.

According to a top central bank official, the United Arab Emirates needs a centralized body for the Islamic finance industry to assist in developing its sukuk market further.
Saif al Shamsi, assistant governor for monetary policy and financial stability, noted that the law calls for a central sharia committee at the federal level that would work with sharia boards at the corporate level but that has not been enabled yet federally.

The National Bank of Abu Dhabi (NBAD) has launched its Sukuk Income Fund, a unique product investing in Sharia'h-compliant investment instruments that provides investors attractive returns with low levels of risk.
The NBAD Sukuk Income Fund represents an open-ended and actively managed product aiming a profit rate of 5% based on current market conditions. It is for institutional and individual investors who can invest as low as USD500 either through lump sum or regular savings plans.
The Fund is intended to catch the best opportunities available to investors by investing in a range of Sukuk and money market investments that are launched by the UAE Government.

Despite the fact that islamic banks have outperformed their conventional peers in most markets, a closer look presents the market dynamics are changing, revealing a new trend.
Two key indicators are cause for reflection: slowing growth rates and eroding profitability, as A T Kearney, a global management consultancy, states.
Cost income ratios are increasing in most markets, putting pressure on profitability. At the same time, declining growth rates are occurring in key geographies including Saudi Arabia, Bahrain and the UAE.

According to A.T. Kearney, the modifying market dynamics are showing a new trend, with two key indicators giving cause for reflection: slowing growth rates and eroding profitability.
Descending growth rates are coming up in key geographies including KSA, Bahrain and the UAE, where growth rates have dropped to between 3% and 8% from double-digit figures.

Family businesses are estimated in the Middle East at around 90% of all companies in the region controlled by families. Furthermore, its importance was underlined with the launch of the Family Business Network GCC, the first of its kind in the area.
The network will be based in Dubai, including members of the Gulf Cooperation Council, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE

Despite the fact that they have been around for many years, they are only now being noticed because of a variety of factors.
The difference between then and now is that there are more Muslims in the financial sector and non-Muslim colleagues know more about Islam because of a combination of internet, 24-7 news, 9/11, documentaries, Dubai's accomplishments, Islamic finance and personalities like His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
After New York Times recently interviewed several American Muslims, two ‘conflicts' were elaborated: Muslims working in conventional finance may encounter ‘interest' against their faith, and challenges of abiding by Islamic ‘traditions' in a secular workplace.

Sultan bin Saeed Al Mansouri, UAE Minister of Economy, has disclosed that the government cut off Dubai-based mortgage provider Amlak Finance’s debt by Dh4 billion.
The debt was reduced through delaying debt as well as through the sale of company's land and the restoration and recovery of other land owned by the company, as well as coming up with financial solutions with a number of third-party creditors.

The Islamic Bank has lost aproximatly 48 billion dollars only last year.
According to a report published by Saudi Al-Eqtisadiah (The Economy) newspaper, revealing AUE banks to such scrutiny and interrogations represented a distortion to the image of the banking system in the country.
The American Department of Treasury has launched a law earlier in June allowing the president to penalize foreign banks that lead financial transactions to buying oil and petroleum products from the Islamic Republic of Iran.

Paul Trowbridge, the chief executive of United Arab Bank (UAB), notes that eccentricity is a virtue, pulling out the lender's newest Islamic credit card, printed vertically more than horizontally. He added that the bank has to work hard in order to get acknowledged, but the bank's advertising blitz is worth it.
It seems that the lender tried to be distinct through high-profile events such as enlisting Fabio Cannavaro, a former captain of the Italian national football team.
The bank extended its loan book last year and wants to conserve the pace of expansion with four branch openings this year.

It seems that Dubai’s Noor Islamic Bank is the only institution in the United Arab Emirates that has been targeted by the US for dealings with Iran. Moreover, it appears that the bank had been a primary conduit for returning foreign-currency oil receipts to Iran, until it agreed in December to end dealings with Iranian entities that have been sanctioned by the US and the European Union, including Iran’s banks Saderat and Melli.
Meanwhile, National Bank of Abu Dhabi, the emirate’s largest bank by assets, noted it is reducing banking activities with Iran because of mounting international sanctions against the country.

Dubai Islamic bank with ties to the emirate’s ruling family stopped doing business with Iranian banks in December, shortly before the United States approved new sanctions targeting the country’s financial system.
The decision by Noor Islamic Bank cuts off another of Iran’s links to the international banking system. Noor appears to have acted indirectly in response to Washington’s efforts to compress the screws on Tehran.
The Iranian economy is under increasing pressure from a growing series of U.S. and European sanctions pointed at stopping its disputed nuclear program. Washington and its allies fear Iran is trying to develop nuclear weapons.

The latest study on Islamic finance and wealth management shows that the UAE residents are estimated to be third richest in the Muslim world with per capita income of $49,600 (Dh182, 000).
It seems that Qatar leads the Muslims world with per capita income of $79,000 followed by Brunei at $51,600.
Gulf Cooperation Council (GCC) countries dominate the top list with Kuwait, Bahrain, Oman and Saudi Arabia ranked fourth, fifth, sixth and seventh.

Oliver Agha, founding Partner of Agha & Co, a shari'ah-compliant law firm based in the United Arab Emirates, is a board member of the Accounting and Auditing Organisation for Islamic Financial Institutions, and secretary general of the World Islamic Finance Institute.
Islamic finance is torn between the market success of emulating conventional structures and developing genuinely Islamic structures that show its spiritual ethos.
The industry is continuing to grow inspite of its inherent problems, and some market analysts forsee it will be valued at anywhere from $3 to $5 trillion by 2016.
While the spiritual precepts behind Islamic finance support risk sharing and partnerships, many products in the market reflect risk profiles of conventional structures. As disputes in such products/structures expand, the judgments could threaten the future of the industry.
But, as a conclusion, Islamic finance is not a failure. It is never correct to blame a discipline for the failures and shortcomings of its adherents. However, in order to continue to grow in a correct way, it must come back to its spiritual underpinnings best reflected by the motto: "Principle before Profit".

Ireland has conducted its first Malaysian-managed fund platform. The Central Bank of Ireland has approved the establishment of CIMB-Principal Islamic Asset Management (Ireland) Public Limited: a joint venture between Kuala Lumpur headquartered CIMB Group and Principal Global Investors.
The newly created joint venture will uphold a range of international Islamic funds on the platform from its Dublin domicile. Three equity UCITS are being registered: Islamic Global Emerging Markets Fund; Islamic Asia-Pacific ex-Japan Fund, and Islamic ASEAN Equity Fund.
Once registered the funds will be spread in the UK, Switzerland, Germany, Saudi Arabia, UAE, Bahrain and Singapore.

UAE energy group Dana Gas appointed an international firm to advise on its $920 million convertible sukuk maturing in October, adding it won't stop to meet its obligations.
Dana Gas shares were up 5.9 per cent at 0945 GMT, while the sukuk was unchanged at 64 cents on the dollar.
Dana Gas has a 3 per cent stake in Hungarian group MOL, worth around 55.2 billion forints ($225m). Potential sales of businesses in Egypt and Kurdistan are also filled with political risk, which would hit the price.
Dana Gas' chief executive told Reuters in September the company was owed around $200m by Egypt.